WASHINGTON DC, April 2, 2007 - Satnews Daily - Intelsat, Ltd., one of the world's largest provider of fixed satellite services, intends to generate growth in its core services this year by leveraging its enhanced strengths in video and broadcasting.
Reporting on the company’s operating results for 2006, CEO David McGlade described last year as “highly productive with regard to Intelsat's operating performance and strategic objectives.” He said an improved product mix and sustained focus on operating efficiencies impacted positively on the adjusted Ebitda for Intelsat, Ltd., which reached $1.08 billion (65 percent of revenue) in 2006, from $652.8 million (56 percent of revenue) in 2005.The company began 2007 with a backlog of $8.1 billion, representing expected future revenue under contracts with customers.
"Our core transponder lease services and managed solutions revenues are growing attractively . . . We ended the year with an $8.1 billion revenue backlog that reflects an increasing concentration of long-term contracts for video applications contributed by the PanAmSat acquisition, and the integration continues to progress on schedule. We are now operating four of the prior PanAmSat satellites from our operations center in Washington, D.C., and expect to transition another three within the next three months. Intelsat is ideally suited to serve a marketplace that is experiencing increased demand in almost every region,"
He said Intelsat was primed to serve increasing market demand for high definition (HD), direct-to-home (DTH) and global programming. Intelsat will also increase its focus on new services to capitalize on the success of its GlobalConnex Managed Services. Growth trends include strong sales of lease and managed solutions services to customers in the media and network services groups, with revenue increases generated by existing and new customers in Africa, the Middle East and North America.
"In 2007, we intend to generate incremental, sustainable growth in our media, network, and government services businesses, which enjoy leading market positions worldwide and benefit from the geographic and service diversity available on the Intelsat global system . . . Our planned service offerings will provide solutions for wireless applications, maritime requirements and IP-based services demanded by the 'new telecom' community that are driving growth in our industry. Lastly, we are accessing other avenues for growth, including the marketing of our technical and industry expertise to regional operators and for hosting proprietary payloads on upcoming satellite launches. We believe that Intelsat's 'one company' approach to operations positions us to lead the industry with regard to creating value."
Looking back at 2006, Glade reported Intelsat revenues of $1.7 billion, a rise $491.2 million, or 42 percent year-on-year. Intelsat’s PanAmSat business, acquired in July 2006, contributed some $456.7 to the revenue increase, including $37.0 million for the operations of the government business of G2 Satellite Solutions Corporation.
Intelsat, however, took a net loss of $368.7 million in 2006. The net loss reflected the impact of an asset impairment charge of $49.0 million to write down the net book value of one of the company's satellites that experienced an anomaly in September 2006. It also reflected the impact of restructuring costs of $26.5 million related to the PanAmSat acquisition.
Total operating expenses for 2006 increased $177.3 million to $1,261.1 million, from $1,083.8 million for the same period in 2005. The period in 2006 included the six months of operating expenses associated with the acquired PanAmSat operations, a $49.0 million satellite impairment charge resulting from an anomaly on the IS-802 satellite in September 2006 and $26.5 million in restructuring costs resulting from the PanAmSat acquisition while the 2005 period included a $69.2 million satellite impairment charge related to the failure of our IS-804 satellite in January 2005.
The net loss of $368.7 million in 2006 reflected a decrease in earnings of $43.4 million from $325.3 million of net loss in 2005. The increased loss in 2006 when compared to 2005 was primarily due to additional interest expense due to the debt associated with the PanAmSat acquisition and an $18.9 million increase in other expenses, net due to an increase in losses from its investment in WildBlue Communications, Inc., offset slightly by a lower provision for income taxes of $18.9 million and the net impact of the PanAmSat acquisition.
For the three months ending December 31, 2006, Intelsat, Ltd reported Ebitda of $387.5 million, or 71 percent of revenue, or an increase of $193.6 million from $193.9 million, or 66 percent of revenue, for the same period in 2005. This increase was primarily due to the net effects of the acquired PanAmSat operations, and the lower satellite impairment charge.
Total revenues for the three months ending December 31, 2006 came to $543.2 million, a rise of $248.3 million, or 84 percent, from $294.9 million for the same period in 2005. The operations of the former PanAmSat business contributed some $237.8 million to the increase in revenue, including $18.3 million for the operations of the G2 Satellite Solutions government business
The net loss of $63.4 million for the three months ended December 31, 2006 was $2.3 million lower than the $65.7 million of net loss for the three months ended December 31, 2005. This reflects higher operating income as a result of the acquired PanAmSat operations, offset by higher net interest expense, which increased $145.2 million to $247.6 million for the three months ended December 31, 2006, from $102.4 million for the same period in 2005. The increase in interest expense was principally due to the incurrence or acquisition of additional debt in the PanAmSat acquisition. This was partially offset by higher total capitalized interest for the period of $11.8 million, and a $9.9 million reduction due to adjustments to non-cash interest expense to correct the year-to-date amortization of deferred fees and discounts.
